Human capital is positively correlated to economic growth as investment tends to boost productivity. It affects economic growth as it helps an economy to develop by expanding knowledge and skills. Human capital refers to the stock of skill, ability, expertise, education, and knowledge in a nation at a point of time. Human capital in the economy manages the central portion of the national wealth. The process of educating a workforce is a type of investment. We need to invest in human capital to produce more human capital out of human resources. Human capital development is based on the idea that education and health are integral parts of human beings only when people have to apply their knowledge to derive maximum benefit. Although investment in human capital tends to produce more growth, it does not necessarily mean the jobs are available for the newly-educated workers. Despite unprecedented human development gains over the past 25 years, serious challenges remain especially for developing countries.

Yogita Parihar

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